Input Service credit - New construction service in plant.

[vinay wakde]

We have received Input service i.e. Commercial Construction service in our plant. The said service  includes excavation of soil, PCC/RCC work, tor steel work etc. The construction service is required for installation of new Coolng tower in existing plant. The service provider had paid service Tax on  50% value of the services under works contract after claiming 40% abatment.  In the matter kindly clarify me the following :-

Whether we are eligible for taking Input service credit  to the extent of service tax paid by the  service provider, in view of the  definitation of  CENVAT on Input services? Whether, the credit of input services for new construction work is still eligible though the word 'Setting up'  is excluded from the defination.

Regards,

VINAY 

AI Summary

No Input Service Credit for Service Tax on Construction Services Post-April 2011, Reverse Charge Tax Also Ineligible. An individual inquired about the eligibility for input service credit on service tax paid for commercial construction services used for installing a new cooling tower in an existing plant. The service provider paid service tax on 50% of the service value under a works contract with a 40% abatement. Respondents clarified that since April 1, 2011, input service credit is not allowed for construction activities, including setting up factories. Additionally, under the reverse charge mechanism, the service receiver must pay the remaining service tax, which is also ineligible for credit.